Tossing up the tax coin
Zaccheus, never mind his height then, was demonised as could be any person that runs errands for Caesar. It is all about giving unto Caesar what belongs to him. It is the law no matter how it affects our income. So do not hate Malawi Revenue Authority (MRA). They are just implementing tax laws like any other government agency, including impossible to reform tear gas crazy colleagues in khaki uniforms. They should be thanking their former boss for redeeming them from short pants. So whichever side the coin is tossed, we are all supposed to pay taxes. Never mind that some of those preaching compliance and encouraging us to do so remain reluctant to let go of their tax-free privileges.
None of us are great fans of MRA. We do not hate them but essentially our dislike is the building block of any rational being, maximising income. The only difference is that some play by the rules and others do not. Another annoying bit is what the taxes we pay really achieve since the fundamental reasoning of any tax regime is to provide services to the general public and creating an enabling environment for doing business through public infrastructure.
It does not include paying undue allowances to some scribes that come and dine at some taxpayers hilltop palace after doing a five-kilometre road trip from Ginnery Corner. But this is not my point. The coin is being tossed a lot and the outcomes seem very worrying. News in the street is that MRA has missed their tax target by K4 billion. Come on MRA, you can play the usual game like you did in the past. Please secretly borrow from one of the banks a quad of a billion and get that into Malawi Government account number one. The target will have been met. You have done this before. Did you finish servicing that loan old uncle Ken was duped to tell us the wrong picture of public finances?
You see, the budget has a huge hole and you can imagine the kind of nights Goodall has. It is not an exciting situation, otherwise my patriotism would come into serious questioning or scrutiny. I love the Malawi passport, the chambo fish from the lake my cousins from Tukuyu are trying to lay some dubious claim to snatch our God-given greasy hydrocarbons. We have given a couple of licences to explore for these hydrocarbons or I should call a monkey by its name, oil. It is all in the hope that one day our public finances can be secured instead of relying on western donors or the dragon. Some of these licences or deals have now been put on hold, apparently to ensure compliance with our laws. Please do not do another Kayelekera.
Malawi will outlive all of us and our patriotism must be shown by rising above personal interests. Any investor should be paying tax and this madness of tax breaks must be buried immediately. When you flip a coin, there is a tendency to think of two sides, a lesson taught in the first instance of probability theory. In government finance, we can think of three sides of the coin. The first side is the taxpayer. The second side is the collector or user of those taxes, government precisely. And then there is the third side. This is the case of a coin that can stand still if perfectly laid down with heads and tails on opposite sides. Call the third side all our foreign partners that I hate to call them donors.
Withdrawal of foreign support is the reason we have a huge deficit in the budget. But in case we do not have any claim on their money, they are simply trying to protect their taxpayer. Not everyone in these rich countries swims in cash. They have lots of poor folks like we do but these guys do pay taxes that finances the lifestyles of most crooks we have in town. We lost foreign aid for reasons that we know very well and this is not a new story. You can tally K1.7 billion, K92 billion and K20 billion. You know what these figures mean. Now getting back to the tax coin, it is easy for the third side to withdraw their support.
There is no law that compels one country to be a benefactor of another sovereign State. But what about the taxpayer? The frustrations have been rising. The country’s business lobby group has made some noise about the potential for not paying tax. And then we had another team of businesses circumstantially associated with tax apprehension fighting a legal battle to stifle technology meant to improve compliance. Such frustrations are nothing but a symptom of a perennial problem of those entrusted with managing public funds abusing the social contract. If taxes were used prudently, we could not have five babies dying every day at Kamuzu Central Hospital. There is limited land at Biwi cemetery to bury infants. Tax evaders and thieves must be shamed and prosecuted in the harshest manner.
It is time to raise our game and invest our taxes instead of pleading with multilateral lenders that have been coming to this country since 1964. Their interests are not Malawi but rather making money for those that invest in their assets. Let us make the donor freeze as an opportunity to wean ourselves from the bad milk lacking in growth nutrients, but at the same time understand their reasons for doing so. Local taxpayers would do the same in this country if paying taxes was not compulsory. After all, it is the private individual that can efficiently allocate recourses
